Bombay Bullion Association

Gold imports by India, the world’s biggest consumer, may soar this quarter as a plunge in prices spurs demand for jewelry, coins and bars during the country’s biggest bullion festival, a jewelers’ group said.

Hedge funds accumulated their second-biggest position against gold on record just as prices rallied the most in 15 months on surging demand for coins and jewelry and Goldman Sachs Group Inc. ended a recommendation to sell.

Gold continues to trade with the single currency with little physical interest. So far, gold has failed to attract any safe-haven inflows, instead trading as any other risk asset and in line with the broader market sentiment

Gold traders are bearish for the first time this year after the Federal Reserve signaled it may refrain from more monetary stimulus and jewelers in India, the world’s biggest bullion market, shut to protest a new tax.

President of the Bombay Bullion Association has projected that 2012’s Indian gold imports could fall to 450 metric tonnes, down 53% compared to the putative 969 metric tonnes that may have been imported last year.